Question 1

Discuss the methods used to identify quality problems.

Accepted Answer

1.A control chart is a graph of a series of successive observations of a particular step,procedure,or operation taken at regular intervals of time.Each observation is plotted relative to specified ranges that represent the limits within which observations are expected to fall.Observations that fall outside the control limits are regarded as nonrandom and worth investigating.
2.A Pareto diagram indicates how frequently each type of failure (defect)occurs.Observations outside control limits serve as inputs for Pareto diagrams.
3.A cause-and-effect diagram helps to identify potential causes of failures or defects.The"backbone" of the diagram represents the problem being examined.The large "bones" coming
off the backbone represent the main categories of potential causes of failure.

Question 2

Rework is an example of ________.

Accepted Answer

A) prevention costs 
B) appraisal costs 
C) internal failure costs 
D) external failure costs 
A) prevention costs 
B) appraisal costs 
C) internal failure costs 
D) external failure costs C

Question 3

Which of the following correctly describes manufacturing cycle time?

Accepted Answer

A) the amount of time it takes from when an order is ready to start on the production line to when the product or service is delivered to the customer 
B) the amount of time it takes to deliver a completed order to a customer plus its waiting time 
C) the amount of time it takes from when a customer places an order for a product or requests a service to when the product or service is delivered to the customer 
D) the amount of time it takes from when an order is ready to start on the production line to when it becomes a finished good plus its waiting time 
A) the amount of time it takes from when an order is ready to start on the production line to when the product or service is delivered to the customer 
B) the amount of time it takes to deliver a completed order to a customer plus its waiting time 
C) the amount of time it takes from when a customer places an order for a product or requests a service to when the product or service is delivered to the customer 
D) the amount of time it takes from when an order is ready to start on the production line to when it becomes a finished good plus its waiting time D

Question 4

Percentage of reworked products is an example of a nonfinancial measure of internal business-process quality.

Accepted Answer

A) True 
 B)False

Question 5

The average waiting time is the average amount of time an order will wait at the company's shipping office before it is sent to the customer.

Accepted Answer

A) True 
 B)False

Question 6

External failure costs are costs incurred on defective products after they have been shipped to customers.

Accepted Answer

A) True 
 B)False

Question 7

What are control charts and how can inferences be drawn from them?

Accepted Answer

A control chart is a graph of a series o

Question 8

Which of the following is considered a cost of quality?

Accepted Answer

A) external failure costs 
B) opportunity costs 
C) sunk costs 
D) contingent liabilities 
A) external failure costs 
B) opportunity costs 
C) sunk costs 
D) contingent liabilities

Question 9

Manufacturing lead time is the sum of waiting time and manufacturing time for an order.

Accepted Answer

A) True 
 B)False

Question 10

The tool crib at a large manufacturing company is responsible for providing tools to the factory workers on demand.The tool crib has a variable demand.Historically,its demand has ranged from 340 to 600 small tools per day with an average of 470.Diane,the tool crib attendant,works eight hours a day,five days a week.Each order is for one small tool and each small tool takes Diane 1 minute to retrieve from the bins.
What is the cycle time for an order? (Round the final answer to the first decimal place. )

Accepted Answer

A) 1)0 minutes per tool 
B) 22.5 minutes per tool 
C) 23.5 minutes per tool 
D) 24.5 minutes per tool 
A) 1)0 minutes per tool 
B) 22.5 minutes per tool 
C) 23.5 minutes per tool 
D) 24.5 minutes per tool

Question 11

One of the most direct financial measures of quality is the costs of quality.

Accepted Answer

A) True 
 B)False

Question 12

The financial cost of quality measures serves as a common denominator for evaluating trade-offs among prevention costs and failure costs.

Accepted Answer

A) True 
 B)False

Question 13

A corporation can measure its quality performance by using financial or nonfinancial measures of quality.Discuss the merits of each method and whether the use of one precludes the use of the other.

Accepted Answer

Financial measures of quality are quanti

Question 14

Inventory carrying costs equal the ________.

Accepted Answer

A) opportunity costs of the investment tied up in inventory and the cost of manufacturing of goods 
B) costs of storage only 
C) opportunity costs of the investment tied up in inventory and the relevant costs of storage 
D) historical costs and the relevant costs of storage 
A) opportunity costs of the investment tied up in inventory and the cost of manufacturing of goods 
B) costs of storage only 
C) opportunity costs of the investment tied up in inventory and the relevant costs of storage 
D) historical costs and the relevant costs of storage

Question 15

Premier Corp expects to spend $801,000 in 2017 in appraisal costs if it does not change its incoming materials inspection method.If it decides to implement a new receiving method,it will save $60,300 in fixed appraisal costs and variable costs of $0.50 per unit of finished product.The new method involves $150,000 in training costs and an additional $157,000 in annual equipment rental.
Internal failure costs average $180 per failed unit of finished goods.During 2014,4% of all completed items had to be reworked.External failure costs average $400 per failed unit.The company's average external failures are 3% of units sold.The company carries no ending inventories,because all jobs are on a per order basis and a just-in-time inventory ordering method is used.
How much will external failure costs change assuming 810,000 units of materials are received and that product failures with customers are cut in half with the new receiving method?

Accepted Answer

A) $16,020 increase 
B) $4,860,000 decrease 
C) $2,187,000 decrease 
D) $9,720,000 decrease 
A) $16,020 increase 
B) $4,860,000 decrease 
C) $2,187,000 decrease 
D) $9,720,000 decrease

Question 16

ISO 9000 are standards designed to encourage organizations to develop environmental management systems to reduce environmental costs.

Accepted Answer

A) True 
 B)False

Question 17

Captain Carl's Seascapes produces sea pictures for sale through catalogs.The company has two workstations,photo production and framing.The photo production station is limited by the speed of operating the photo development machine.Framing is limited by the speed of the employees.Framing normally waits for work from photo production.Each department works an eight-hour day.If Captain Carl's Seascapes adds an earlier half shift so that photo production begins work four hours earlier than framing each day,the two departments generally finish their work at about the same time.Not only does this eliminate the bottleneck,but it also increases finished units produced each day by 200 units.All units produced can be sold.The cost of operating the photo production department four more hours each day is $1310.The contribution margin of the finished products is $20 each.
What is the change in the daily contribution margin if the change is made?

Accepted Answer

A) $250 
B) $2690 
C) $4000 
D) $200 
A) $250 
B) $2690 
C) $4000 
D) $200

Question 18

Manufacturing Cycle Efficiency (MCE)= Value-added Manufacturing Time divided by Manufacturing Cycle Time.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is true of a bottleneck?

Accepted Answer

A) It occurs in an operation when the work to be performed approaches or exceeds the capacity available to do it. 
B) It occurs in an operation when there is excess capacity to complete the work given. 
C) It is the uncertainty about when customers will order products or services. 
D) It is the time taken by a manufacturing department to produce a finished product. 
A) It occurs in an operation when the work to be performed approaches or exceeds the capacity available to do it. 
B) It occurs in an operation when there is excess capacity to complete the work given. 
C) It is the uncertainty about when customers will order products or services. 
D) It is the time taken by a manufacturing department to produce a finished product.

Question 20

Without financial quality measures,________.

Accepted Answer

A) customer satisfaction and employee satisfaction cannot be measured 
B) the short-run effectiveness of nonfinancial quality measures is questionable 
C) cost-benefit analysis is not possible 
D) quality problems might not be identified until it is too late 
A) customer satisfaction and employee satisfaction cannot be measured 
B) the short-run effectiveness of nonfinancial quality measures is questionable 
C) cost-benefit analysis is not possible 
D) quality problems might not be identified until it is too late

Discuss the methods used to identify quality problems.

Rework is an example of ________.

Which of the following correctly describes manufacturing cycle time?

Percentage of reworked products is an example of a nonfinancial measure of internal business-process quality.

The average waiting time is the average amount of time an order will wait at the company's shipping office before it is sent to the customer.

External failure costs are costs incurred on defective products after they have been shipped to customers.

What are control charts and how can inferences be drawn from them?

Which of the following is considered a cost of quality?

Manufacturing lead time is the sum of waiting time and manufacturing time for an order.

One of the most direct financial measures of quality is the costs of quality.

The financial cost of quality measures serves as a common denominator for evaluating trade-offs among prevention costs and failure costs.

A corporation can measure its quality performance by using financial or nonfinancial measures of quality.Discuss the merits of each method and whether the use of one precludes the use of the other.

Inventory carrying costs equal the ________.

ISO 9000 are standards designed to encourage organizations to develop environmental management systems to reduce environmental costs.

Manufacturing Cycle Efficiency (MCE)= Value-added Manufacturing Time divided by Manufacturing Cycle Time.

Which of the following is true of a bottleneck?

Without financial quality measures,________.

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets,direct-Cost Variances,and Management Control

Flexible Budgets, overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Strategy,balanced Scorecard,and Strategic Profitability Analysis

Pricing Decisions and Cost Management

Cost Allocation, customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, rework, and Scrap

Inventory Management, just-In-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, transfer Pricing, and Multinational Considerations

Performance Measurement, compensation, and Multinational Considerations

Filters

Exam 19: Balanced Scorecard: Quality and Time

Discuss the methods used to identify quality problems.

Rework is an example of ________.

Which of the following correctly describes manufacturing cycle time?

Percentage of reworked products is an example of a nonfinancial measure of internal business-process quality.

The average waiting time is the average amount of time an order will wait at the company's shipping office before it is sent to the customer.

External failure costs are costs incurred on defective products after they have been shipped to customers.

What are control charts and how can inferences be drawn from them?

Which of the following is considered a cost of quality?

Manufacturing lead time is the sum of waiting time and manufacturing time for an order.

One of the most direct financial measures of quality is the costs of quality.

The financial cost of quality measures serves as a common denominator for evaluating trade-offs among prevention costs and failure costs.

A corporation can measure its quality performance by using financial or nonfinancial measures of quality.Discuss the merits of each method and whether the use of one precludes the use of the other.

Inventory carrying costs equal the ________.

ISO 9000 are standards designed to encourage organizations to develop environmental management systems to reduce environmental costs.

Manufacturing Cycle Efficiency (MCE)= Value-added Manufacturing Time divided by Manufacturing Cycle Time.

Which of the following is true of a bottleneck?

Without financial quality measures,________.

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets,direct-Cost Variances,and Management Control

Flexible Budgets, overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Strategy,balanced Scorecard,and Strategic Profitability Analysis

Pricing Decisions and Cost Management

Cost Allocation, customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, rework, and Scrap

Inventory Management, just-In-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, transfer Pricing, and Multinational Considerations

Performance Measurement, compensation, and Multinational Considerations

Filters